This undated photo provided by Paige Fiedler shows Iowa attorney Paige Fiedler. Records obtained by The Associated Press show she negotiated a $2.35 million settlement for a state employee who was sexually harassed by an agency director who was a longtime ally of Gov. Kim Reynolds after backing off a threat to file suit days before the November 2018 election. (Paige Fiedler via AP)

APNewsBreak: Pre-election lawsuit threat led to Iowa payout

February 28, 2019 - 3:50 pm

The Associated Press

IOWA CITY, Iowa (AP) — The state of Iowa accelerated an unprecedented $4.15 million settlement with two sexual harassment victims after a lawyer for one of them threatened a lawsuit days before the election that would dig into Gov. Kim Reynolds' longtime association with the agency director who harassed them, according to emails obtained by The Associated Press.

Attorney Paige Fiedler backed off her plan to file the lawsuit after a state lawyer told her that he "just got authority this morning" from the governor's administration to settle the case, the emails show. The exchange came five days before the Nov. 6 midterm election, which featured a close race between the Republican governor and a Democratic challenger.

Reynolds won the election. Within weeks, her administration backed the $4.15 million payout to two subordinates of former Iowa Finance Authority Director Dave Jamison, a Reynolds ally who had sexually harassed the women for years. The deals included $785,569 in legal fees for Fiedler's firm — nearly 40 times as much as the other woman's attorney received.

The payouts were formally approved by a state board this month before any lawsuits were filed — a break from normal practice — and came from a fund used to support affordable housing developments . State Auditor Rob Sand has criticized the deals, saying taxpayers shouldn't have to foot the bill for Jamison's misconduct.

In an Oct. 1 letter, Fiedler demanded the state pay $2.6 million to settle with her client, Beth Ann Mahaffey, who left her job at the finance authority after complaining about Jamison. Fiedler told Solicitor General Jeff Thompson that the offer was good until Nov. 4 — two days before the election in which voters would decide a tight race between Reynolds and Democrat Fred Hubbell.

Fiedler told AP that she picked that deadline because she worried Hubbell would be less likely to settle if he won since the scandal happened on Reynolds' watch. Her client actually had until Dec. 4 to sue under a legal deadline for her claims.

The office of Attorney General Tom Miller denied any political motive in the settlements, saying it recommended them after an independent investigation detailed Jamison's harassment.

"We believe it was the right thing to do, both for the best interests of the state and out of concern for the victims," spokesman Lynn Hicks said.

Governor's office spokesman Pat Garrett called the settlements "in the best interest of the state of Iowa, of taxpayers, and more importantly the victims."

Fiedler warned in the letter that without a settlement, she would conduct "extensive discovery" into Reynolds' friendship with Jamison dating to when they were county officials in the 1990s. Reynolds called Jamison a family friend whom she knew as a heavy-drinking partier with an odd sense of humor but has denied knowledge of his misconduct. The discovery process includes depositions in which witnesses are questioned under oath and demands for documents.

Fiedler wrote that Reynolds' claim that she was never saw Jamison act inappropriately "strains credulity." She warned that if Reynolds had any knowledge of Jamison's behavior, the state would be liable because it failed to take steps to prevent his harassment.

"Frankly, it is hard to imagine that Governor Reynolds did not know what kind of man Dave Jamison was," Fiedler wrote. "By all accounts, the two had a very long, close friendship dating back decades. Jamison's behavior is said to have been worse when he was out of town at conferences. Jamison and Governor Reynolds likely attended dozens — if not hundreds — of such conferences together over the years, and we will conduct extensive discovery concerning all of them."

Reynolds fired Jamison last March after the women complained to the governor's office. An investigation found that Jamison groped one employee in public, played a pornographic video on his phone in front of her, and constantly made sexual remarks. The investigation found that employees may not have complained earlier because Jamison bragged about his ties to the governor.

"For seven years, this man was allowed to run a personal fiefdom, using the power and resources given to him by the State of Iowa to torment female workers for his own perverse enjoyment," Fiedler wrote.

Fiedler emailed Thompson Nov. 1, saying she planned to file Mahaffey's lawsuit the next day because she hadn't heard from him about the settlement demand. "That doesn't mean we're uninterested in resolving this, but my client is anxious to get this underway," Fiedler wrote.

Thompson replied quickly.

"Just got authority this morning. Yes really," he wrote. "Filing tomorrow could complicate matters since all discussions on my end have included concept that pre-litigation resolution was beneficial."

The two later negotiated a $2.35 million settlement on Nov. 23. The state reached a similar agreement with authority employee Ashley Jared for $1.8 million.

Jared's deal included $20,000 for her attorney, Melissa Schilling, about 2.5 percent of what Fiedler received. The divergent legal fees reflect the different agreements the women had with their attorneys.